Court ruling disrupts EU’s climate change negotiations

Attempts by the European Commission and the Swedish presidency of the EU to forge a united stance on international climate change negotiations were thrown into turmoil yesterday (23 September) by a ruling from the European Court of First Instance.

The court ruled that in its handling of the EU’s emissions trading scheme the Commission had exceeded its powers when, in 2007, it rejected plans from Poland and Estonia on the allocation of emissions. The court ruled that member states should retain the right to decide how to allocate emissions allowances among different economic operators. Further challenges are pending at the court from a further six member states.

A spokeswoman for Stavros Dimas, the European commissioner for the environment, said he was “extremely disappointed”. The judgment comes as the Commission tries to resist attempts by EU member states in central and eastern Europe to keep at least some of their unused carbon credits from the first phase of their commitments under the Kyoto Protocol (2008-12), to reflect, as they claim, the efforts they have made to reduce pollution.

The Commission fears that surplus credits could dilute the system and undermine carbon-reduction goals.

Common position

The EU is struggling to find a common position on a range of climate change issues ahead of a series of international meetings designed to agree new greenhouse gas reductions. World leaders discussed climate change at the UN General Assembly in New York on Tuesday (22 September) and the climate change negotiations will also be on the agenda of the meeting of leaders from the G20 group of developed and developing nations on 24-25 September.

One of the issues the EU has to agree is how much money to give to developing countries to deal with the costs of climate change.

The Commission says that by 2020 the EU should pay developing countries between €2 billion and €15bn each year to adapt and to cut emissions. But agreeing a figure will require a deal on spreading the cost between the EU’s richer and poorer member states.

Nervousness about the risks to European industry continues to play into the discussions. Last week (18 September), a letter from France’s President Nicolas Sarkozy and Germany’s Chancellor Angela Merkel called for a carbon tax on imports from countries that do not sign up to tough climate targets. The two leaders warned that “it would not be acceptable that the efforts of the most ambitious countries are compromised by carbon leakage resulting from the absence or insufficient action” of others.

Import taxes and other so-called ‘border adjustment’ measures are controversial in the EU and are viewed by some member states and Commission trade officials as a protectionist tool incompatible with world trade rules.